Exhibit
10.21


 


RESACA EXPLOITATION, INC.


 


NONQUALIFIED STOCK OPTION AGREEMENT


 


Optionee:  Kevin
Andis


 


1.                                      Grant of Stock Option.  As of the Grant
Date (identified in Section 18 below), Resaca
Exploitation, Inc., a Texas corporation (the “Company”) hereby grants a Nonqualified Stock Option (the “Option”) to the Optionee (identified above), an Employee of the Company, to purchase the number of shares of
the Company’s common stock, $0.01 par value per share (the “Common Stock”), identified in Section 18
below (the “Shares”), subject to
the terms and conditions of this agreement (the “Agreement”) and the Resaca Exploitation, Inc. 2008 Stock
Incentive Plan (the “Plan”).  The Plan is hereby incorporated herein in its
entirety by reference.  The Shares, when
issued to Optionee upon the exercise of the Option, shall be fully paid and
nonassessable.  The Option is not an “incentive
stock option” as defined in Section 422 of the Internal Revenue Code.


 


2.                                      Definitions.                                All capitalized
terms used herein shall have the meanings set forth in the Plan unless
otherwise provided herein. Section 18 sets forth meanings for
certain of the capitalized terms used in this Agreement.


 


3.                                      Option Term.  The Option shall commence on
the Grant Date (identified in Section 18 below) and terminate on
the eighth (8th) anniversary of the Grant Date as specified in Section 18.
The period during which the Option is in effect and may be exercised is
referred to herein as the “Option Period”.


 


4.                                      Option Price.  The Option Price per Share
is identified in Section 18.


 


5.                                      Vesting. 
The total number of Shares subject to this Option shall vest in
accordance with the Vesting Schedule
(described in Section 18). 
The Shares may be purchased at any time after they become vested, in
whole or in part, during the Option Period; provided, however, the Option may
only be exercisable to acquire whole Shares. 
The right of exercise provided herein shall be cumulative so that if the
Option is not exercised to the maximum extent permissible after vesting, the
vested portion of the Option shall be exercisable, in whole or in part, at any
time during the Option Period.


 


6.                                      Method of Exercise.  The Option is exercisable by delivery of a
written notice to the Secretary of the Company, signed by the Optionee,
specifying the number of Shares to be acquired on, and the effective date of,
such exercise.  The Optionee may withdraw
notice of exercise of this Option, in writing, at any time prior to the close
of business on the business day that immediately precedes the proposed exercise
date.


 


7.                                      Method of Payment.  Subject to applicable provisions of the Plan,
the Option Price upon exercise of the Option shall be payable to the Company in
full either: (i) in cash or its equivalent; (ii) subject to prior
approval by the Committee in its discretion, by tendering previously acquired
Shares having an aggregate Fair Market Value (as defined in the Plan) at the
time of exercise equal to the total Option Price; (iii) subject to prior
approval by the Committee 


 

















 


in its discretion, by withholding Shares
which otherwise would be acquired on exercise having an aggregate Fair Market
Value at the time of exercise equal to the total Option Price; or (iv) any
other permitted method pursuant to the applicable terms and conditions of the
Plan.


 


As soon as practicable after receipt of a
written notification of exercise and full payment, the Company shall deliver to
or on behalf of the Optionee, in the name of the Optionee or other appropriate
recipient, Share certificates or other evidence of ownership for the number of
Shares purchased under the Option.


 


8.                                      Restrictions on Exercise.  The Option may not be
exercised if the issuance of such Shares or the method of payment of the
consideration for such Shares would constitute a violation of any applicable
federal or state securities or other laws or regulations, or any rules or
regulations of any stock exchange on which the Common Stock is listed.  In addition, Optionee understands and agrees
that the Option cannot be exercised if the Company determines that such
exercise, at the time of such exercise, will be in violation of the Company’s
insider trading policy.


 


9.                                      Termination of Employment.  Voluntary or involuntary
termination of Employment shall affect Optionee’s rights under the Option as
follows:


 


(a)                                  Termination for
Cause.  The non-vested portion of the
Option shall expire and terminate on the date of termination of Employment and
shall not be exercisable to any extent if Optionee’s Employment is terminated
for Cause (as defined in the Plan at the time of such termination of
Employment).  The vested portion of the
Option shall expire on the thirty (30) day anniversary of the termination of
Employment to the extent not previously exercised by Optionee.  In no event may the Option be exercised after
the earlier of (i) the expiration of the Option Period or (ii) the
thirty (30) day anniversary of the date of termination of Employment for Cause.


 


(b)                                 Voluntary
Termination or Retirement.  If
Optionee’s Employment is voluntarily terminated by Optionee or terminated for
Retirement, then (i) the non-vested portion of the Option shall
immediately expire on the termination date and (ii) the vested portion of
the Option shall expire to the extent not previously exercised before the one (1) year anniversary of the
date of such termination of Employment. 
In no event may the Option be exercised after the earlier of (i) the
expiration of the Option Period or (ii) the one (1) year anniversary of the date of termination of
Employment due to voluntary termination or Retirement.


 


(c)                                  Death or
Disability.  If Optionee’s
Employment is terminated due to death or Disability (as defined in the Plan at
the time of such termination), then (i) the Option shall immediately become
fully vested on the termination of Employment date and (ii) the vested
portion of the Option shall expire on the one (1) year anniversary date of
the termination of Employment date to the extent not previously exercised by
Optionee or, in the case of death, by the person or persons to whom Optionee’s
rights under the Option have passed by will or by the laws of descent and
distribution or, in the case of Disability, by Optionee or Optionee’s legal
representative.  In no event may the
Option be exercised 


 


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by anyone on or after the
earlier of (i) the expiration of the Option Period or (ii) one (1) year
after the date of termination of Employment due to Optionee’s death or
Disability.


 


(d)                                 Other
Involuntary Termination.  If
Optionee’s Employment is terminated for any reason other than for Cause,
Retirement, death or Disability, or voluntary termination, then (i) the
Option shall immediately become fully vested on the termination of Employment
date and (ii) the vested portion of the Option shall expire to the extent
not previously exercised within one (1) year  after
such termination date.  In no event may
the Option be exercised by anyone after the earlier of (i) the expiration
of the Option Period or (ii) one (1) year after the termination of
Employment date even if Optionee becomes deceased during such period.  The termination of Employment of Optionee due
to or as a result of the termination or expiration of the Co-Employer
Agreement, dated July 11, 2008, by and between the Company and Torch
Energy Advisors Incorporated shall be considered an involuntary termination of
Optionee’s Employment for purposes of this Agreement.


 


10.                               Independent Legal and Tax Advice.  Optionee acknowledges that the Company has
advised Optionee to obtain independent legal and tax advice regarding the grant
and exercise of the Option and the disposition of any Shares acquired thereby.


 


11.                               Reorganization of Company.  The existence of the Option shall not affect in
any way the right or power of the Company or its shareholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in Company’s capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Shares or the rights thereof,
or the dissolution or liquidation of the Company, or any sale or transfer of
all or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.


 


12.                               Adjustment of Shares.  In the event of stock
dividends, spin-offs of assets or other extraordinary dividends, stock splits,
combinations of shares, recapitalizations, mergers, consolidations,
reorganizations, liquidations, issuances of rights or warrants and similar
transactions or events involving Company, appropriate adjustments shall be made
to the terms and provisions of the Option as provided in the Plan.


 


13.                               No Rights in Shares.  Optionee shall have no
rights as a shareholder in respect of the Shares until the Optionee becomes the
record holder of such Shares.


 


14.                               Investment Representation.  Optionee will enter into
such written representations, warranties and agreements as Company may
reasonably request in order to comply with any federal or state securities
law.  Moreover, any stock certificate for
any Shares issued to Optionee hereunder may contain a legend restricting their
transferability as determined by the Company in its discretion.  Optionee agrees that Company shall not be obligated
to take any affirmative action in order to cause the issuance or transfer of
Shares hereunder to comply with any law, rule or regulation that applies
to the Shares subject to the Option.


 


15.                               No Guarantee of Employment.  The Option shall not confer upon Optionee any
right to continued employment with the Company or any affiliate thereof.


 


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16.                               Withholding of Taxes.  The Company shall have the right to (a) make
deductions from the number of Shares otherwise deliverable upon exercise of the
Option in an amount sufficient to satisfy withholding of any federal, state or
local taxes required by law, or (b) take such other action as may be
necessary or appropriate to satisfy any such tax withholding obligations.


 


17.                               General.


 


(a)                                  Notices.  All notices under this Agreement shall be
mailed or delivered by hand to the parties at their respective addresses set
forth beneath their signatures below or at such other address as may be
designated in writing by either of the parties to one another, or to their
permitted transferees if applicable. 
Notices shall be effective upon receipt.


 


(b)                                 Shares Reserved.  The Company shall at all times during the
Option Period reserve and keep available under the Plan such number of Shares
as shall be sufficient to satisfy the requirements of this Option.


 


(c)                                  Transferability
of Option.  The Option
is transferable only to the extent permitted under the Plan at the time of
transfer (i) by will or by the laws of descent and distribution, (ii) by
a qualified domestic relations order (as defined in Section 414(p) of
the Internal Revenue Code), or (iii) to Optionee’s Immediate Family or
entities established for the benefit of, or solely owned by, the Optionee’s
Immediate Family, but only to the extent permitted under the Plan.  No right or benefit hereunder shall in any
manner be liable for or subject to any debts, contracts, liabilities,
obligations or torts of Optionee or any permitted transferee thereof.


 


(d)                                 Amendment and
Termination.  No
amendment, modification or termination of this Agreement shall be made at any
time without the written consent of Optionee and Company.


 


(e)                                  No Guarantee of
Tax Consequences.  The Company
makes no commitment or guarantee that any tax treatment will apply or be
available to Optionee or any other person. 
The Optionee has been advised, and provided with the opportunity, to
obtain independent legal and tax advice regarding the grant and exercise of the
Option and the disposition of any Shares acquired thereby.


 


(f)                                    Severability.  In the event that any provision of this
Agreement shall be held illegal, invalid, or unenforceable for any reason, such
provision shall be fully severable, but shall not affect the remaining
provisions of the Agreement, and the Agreement shall be construed and enforced
as if the illegal, invalid, or unenforceable provision had not been included
herein.


 


(g)                                 Supersedes
Prior Agreements.  This
Agreement shall supersede and replace all prior agreements and understandings,
oral or written, between the Company and the Optionee regarding the grant of
the Options covered hereby.


 


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(h)                                 Governing Law.  This Agreement shall be construed in
accordance with the laws of the State of Texas, without regard to its conflict
of law provisions, to the extent federal law does not supersede and preempt
Texas law.


 


18.                               Definitions and Other Terms.  The following capitalized
terms shall have those meanings set forth opposite them:


 


	
   

  	
   (a)

  	
  Optionee:                                                                    Kevin Andis

  
	
   

  	
   

  	
   

  
	
   

  	
   (b)

  	
  Grant Date:                                                            January 21,
  2009

  
	
   

  	
   

  	
   

  
	
   

  	
   (c)

  	
  Shares:                                                                                 Fifty
  Thousand (50,000) Shares of the Company’s Common Stock.

  
	
   

  	
   

  	
   

  
	
   

  	
   (d)

  	
  Option Price:                                                   £          
  per Share.

  
	
   

  	
   

  	
   

  
	
   

  	
   (e)

  	
  Option Period:                                           January 21,
  2009 through January 21, 2017 (until 5:00 p.m. CST).

  
	
   

  	
   

  	
   

  
	
   

  	
   (f)

  	
  Vesting Schedule:                        Options
  covered by this Option Agreement shall become vested, provided that, subject
  to Section 9, Optionee is then, and continuously from the Grant
  Date has been, an Employee of
  the Company, in accordance with the following schedule:

  



 


	
   

  	
  Vesting Date

  	
   

  	
  Vested %

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  First Anniversary of the
  Grant Date

  	
   

  	
  33 1/3

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Second Anniversary of the
  Grant Date

  	
   

  	
  33 1/3

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Third Anniversary of the
  Grant Date

  	
   

  	
  33 1/3

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Total

  	
   

  	
  100

  	
  %

  	
   

  	
   

  



 


Notwithstanding the above vesting schedule,
in the event of a “Change in Control” of the Company (as defined in the Plan at
the time of such event), the non-vested portion of the Option shall become
immediately 100% vested as of the Change in Control date.


 


[Signature page follows]


 


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IN WITNESS
WHEREOF, the Company, as of the Grant Date, has caused this Agreement to be
executed on its behalf by its duly authorized officer and Optionee has hereunto
executed this Agreement as of the same date.


 


	
   

  	
  RESACA EXPLOITATION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary Lou Fry

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Mary Lou Fry

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  Resaca Exploitation, Inc.

  
	
   

  	
  1331 Lamar Street, Suite 1450

  
	
   

  	
  Houston, TX 77010

  
	
   

  	
  Attn:    General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OPTIONEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Kevin Andis

  
	
   

  	
  KEVIN ANDIS

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  507 Mariners Drive

  
	
   

  	
  Kemah, Texas 77565

  



 


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